Shadow Minister of Finance Kwasi Thompson yesterday demanded that the government explain why an amendment to tariffs on boats was not tabled, debated and passed during the recent budget exercise.
Thompson was referring to a memorandum from the Ministry of Finance dated June 23 and signed by Financial Secretary Simon Wilson instructing the Department of Customs to treat tariff heading 8903 – which deals with pleasure vessels – as duty free until subsequent amendments to the Tariff Act are done during the next budget exercise.
In a statement, Thompson said the memorandum raises a number of very serious and fundamental questions that demand an answer.
“What exactly is the legal authority for the Ministry of Finance to adjust these tariffs outside of the parliamentary process? It is our understanding that only through Parliament can tariffs be changed,” noted the statement.
“As such, are the instructions in the memorandum lawful instructions? Why is this being done in secret? This matter was never raised in the public domain during the budget exercise as a policy initiative of the government. Why has the government sought to sneak this on the Bahamian people? Whose interests are being served by these changes done outside of the public’s view?”
He continued, “Why is the government giving further tax breaks to the well off? There is no good reason to provide blanket duty free provisions for pleasure crafts that are purchased in the main by high income and wealthy individuals. We cannot accept that we have asked pensioners to pay VAT on medicine and single parents to pay VAT on baby supplies, while we allow the rich to buy pleasure boats duty free. That is an untenable position that must be reversed immediately.
“If true, we are troubled by this development and demand that the government take immediate steps to explain publicly what happened and to correct the situation without delay.”
Guardian Business understands that the move to remove duty from pleasure vessels is to strengthen The Bahamas’ competitive edge in the boating and yachting market, by attracting more boaters and yachters to purchase and register their vessels in this jurisdiction, instead of in Florida.
It is believed that the government would benefit from taxes on the sales of the vessels, as well as registration fees, as opposed to just the revenue collected from cruising permits each year.